Dell makes computers. It must manage the supply and inventory of components such

Question

Dell makes computers. It must manage the supply and inventory of components such as monitors and hard drives. Which of these methods should be recommended for this purpose?

1.

Forecast the demand for each component, and make those quantities available with an additional amount of safety stock

2.

Use the forecasts of the end items, and use MRP logic for determining when and how much of these components are needed

3.

Use a single period inventory model to determine the amount of each component that the company should stock

4.

Buy the components in bulk to obtain quantity discounts, quantities large enough to provide Dell for about a year's worth of sales

Explanation / Answer

second option is correct.

in this they can estimate the demand for its comonents in an effecitve way and they can arrange them. by following Materal Requirements Planning, the firm can produce the required quantity of output at needed time. and the inventory cost also very minimum in this model.

so, option 2 is correct.

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